The two-day Inclusive Finance India Summit, formerly known as Microfinance India Summit, concluded on Tuesday with bankers and lenders vowing to stem the cash crunch that is hitting the industry across the country due to demonetisation.
Two important reports by organisers Access India were released – The Inclusive Finance State of the Sector Report by Prof M S Sriram (IIM-B) and The Responsible Finance India report by Dr Alok Misra.
Vipin Sharma, CEO Access Development Services, thanked about 120 speakers at the summit and the delegates, all stakeholders for supporting and contributing to the summit.
Rajnish Kumar, Managing Director of State Bank of India, pitching for cashless economy, said SBI deposits have exceeded Rs.100,000 crore in savings account alone from November 8. Since deposits are not an issue, he said the major task ahead is to lend the money to needy and enhance the digitisation mode of banking operations and payments.
Since banks alone cannot ensure universal financial inclusion, Business Correspondents will be more reliable. "BCs can reduce up to 70% of the transaction costs of the bank but for this to happen, it is important to provide proper training and ensure availability of a range of products through them," he said.
The IFMR report on over indebtedness attracted the attention of many delegates in the second plenary session. The results of IFMR study on overindebtedness found that 23% of the MFI clients in the sample were over indebted. The drivers of over-indebtedness include unstable income, multiple borrowings, high loan sizes, poverty levels, misuse of loans and cross borrowings.
Alok Misra, author or the Responsible Finance India Report, however, said that the problem of overindebtedness was "not universal but was limited to certain pockets."